>I didn't know this idea of natural monopolies being public goods
>had survived Judge Green's reign. Anyway, is this a convincing
>argument for increasing competition? Or is Hollings just upset
>that the Telecom Act of 1996 has essentially failed for
>consumers? I think the right argument that Verizon must obey the
>law.
The Baby Bells were supposed to be the public utilities that survived until 1996. The Telecom Act was seen by some as ending all public interest in the name of competition. The law failed but largely because competition as a policy has failed, just as it failed in electricity deregulation. Not because Verizon or the Baby Bells broke the law, although they may have on the margin, but because no one is interested in competing for local customers, except for business and some of the richer customers.
The best solution is to go back to the era of regulated local monopolies- with the emphasis on regulated. In the House, the current bill being debated will allow the Baby Bells to deploy broadband Internet services without having to open them up to competition; in exchange, the are mandated to deploy the wiring to all neighborhoods, rich and poor, within five years. The bill still needs price regulation to restore real regulation of the industry, but universal deployment mandates is the right direction, since "competition" will lead to deployment of wiring in the poorest areas maybe never.
-- Nathan Newman